Net Asset Value - Q1 2023
4 May 2023
The Renewables Infrastructure Group Limited
"TRIG" or "the Company", a London-listed investment company advised by InfraRed Capital Partners ("InfraRed") as Investment Manager and Renewable Energy Systems ("RES") as Operations Manager
Net Asset Value - Q1 2023
TRIG announces that its estimated unaudited Net Asset Value as at 31 March 2023 is 134.8 pence per share, an increase of 0.2p to the Company's last announced audited Net Asset Value as at 31 December 2022.
The key drivers of this movement in Net Asset Value per share are summarised in the table with further details following:
|
|
Net Asset Value (pence per share) |
Positive Movements |
Negative Movements |
|
NAV per share at 31 December 2022 |
134.6p |
|
|
|
Q1 generation & power prices compared to forecast |
|
|
(1.2)p |
|
Q1 inflation compared to forecast |
|
+0.4p |
|
|
Reduction in forecast power prices |
|
|
(0.9)p |
|
Increase in forecast REGO prices |
|
+1.2p |
|
|
Value enhancements |
|
+0.7p |
|
|
NAV per share at 31 March 2023 |
134.8p |
|
|
Q1 generation & power prices compared to forecast
Generation has been slightly below budget and achieved power prices have also been lower than forecast at 31 December 2022, mitigated by higher realised Renewable Energy Guarantees of Origin certificate (REGO) prices, resulting in a negative impact of 1.2p/share. The impact of lower than forecast power prices during the period is reduced by government interventions ("windfall" taxes) provided for in the 31 December valuation as power prices generally have remained above tax thresholds.
Q1 inflation compared to forecast
Actual inflation in the markets in which TRIG has investments has been ahead of forecasts for the first quarter, resulting in positive movement of 0.4p/share. The Company's valuation assumptions for the remainder of 2023 and thereafter are unchanged (at the annualised rates of UK RPI 5%, UK CPI 4.25%, Eurozone 3% reducing to 2.75%/2%/2% respectively for 2024).
Over the next 10 years, 54% of the Company's forecast revenues per unit of generation is directly indexed to inflation.
Reduction in forecast power prices
Across TRIG's markets, short and medium term power price forecasts have decreased significantly, however they remain close to or above the thresholds of the windfall taxes introduced in 2022. Accordingly the reductions in power price forecasts have had the effect of reducing the taxes assumed to be payable to governments, materially sheltering the effect of the reduction in forecasts on the Company's NAV. In addition the high level of fixed income offered by TRIG's portfolio (estimated at 65% for 2023 as a whole) further protects the NAV from power price falls. Longer-term forecasters have generally remained at or slightly above previous forecasts for wholesale prices adopted by the Company at 31 December 2022.
The overall impact was a reduction of 0.9p/share.
Increase in forecast REGO prices
Renewable Energy Guarantees of Origin is a UK Scheme whereby certificates (REGOs) are issued to generators of renewable electricity that are sold to purchasers to demonstrate that the electricity they are using has been generated from renewable sources.
Pricing for these certificates has been performing well ahead of previously forecast assumptions having increased significantly over the last year or so and forecast prices have been updated to reflect this. The impact of this change in forecasts increased the NAV per share by 1.2p/share.
Value enhancements
Power price risk management delivered 0.7p/share of value enhancement in the period. This follows the Corporate PPA signed for Blary Hill onshore windfarm in the UK announced in March, where a 10-year price was agreed, together with other power price fixes.
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Richard Crawford
Phil George
Minesh Shah
Mohammed Zaheer
H/Advisors Maitland +44 (0) 20 7379 5151
Charles Withey
Investec Bank Plc +44 (0) 20 7597 4000
Lucy Lewis
Tom Skinner
Denis Flanagan
BNP Paribas +44 (0) 20 7595 9444
Virginia Khoo
Carwyn Evans
The Company
The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading London-listed renewable energy infrastructure investment company. The Company seeks to provide shareholders with an attractive long-term, income-based return with a positive correlation to inflation by focusing on strong cash generation across a diversified portfolio of predominantly operating projects.
TRIG is invested in a portfolio of wind, solar and battery storage projects across six countries in Europe with aggregate net generating capacity of over 2.8GW; enough renewable power for 1.9 million homes and to avoid over 2.4 million tonnes of carbon emissions per annum. TRIG is seeking further suitable investment opportunities which fit its stated Investment Policy.
Further details can be found on TRIG's website at www.trig-ltd.com.
Investment Manager
InfraRed Capital Partners is an international infrastructure investment manager, with more than 180 professionals operating worldwide from offices in London, New York, Sydney and Seoul. Over the past 25 years, InfraRed has established itself as a highly successful developer and custodian of infrastructure assets that play a vital role in supporting communities. InfraRed manages US$14bn+ of equity capital1 for investors around the globe, in listed and private funds across both income and capital gain strategies.
A long-term sustainability-led mindset is integral to how InfraRed operates as it aims to achieve lasting, positive impacts and deliver on its vision of Creating Better Futures. InfraRed has been a signatory of the Principles of Responsible Investment since 2011 and has achieved the highest possible PRI rating2 for its infrastructure business for seven consecutive assessments, having secured a 5 star rating for the 2021 period. It is also a member of the Net Zero Asset Manager's Initiative and is a TCFD supporter.
InfraRed is part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. InfraRed represents the infrastructure equity arm of SLC Management, which also incorporates BentallGreenOak, a global real estate investment management adviser, and Crescent Capital, a global alternative credit investment asset manager.
1 Data as at Q3 2022. Equity Capital is calculated using a 5-year average FX rate.
2 Principles for Responsible Investment ("PRI") ratings are based on following a set of Principles, including incorporating ESG issues into investment analysis, decision-making processes and ownership policies. More information is available at https://www.unpri.org/about-the-pri
Operations Manager
TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's largest independent renewable energy company.
RES has been at the forefront of wind energy development for over 40 years, with the expertise to develop, engineer, construct, finance and operate projects around the globe. RES has developed or constructed onshore and offshore wind, solar, energy storage and transmission projects totalling more than 23GW in capacity. RES supports over 12GW of operational assets worldwide for a large client base. Headquartered in Hertfordshire, UK, RES is active in 11 countries and has over 2,500 employees engaged in renewables globally.
RES is an expert at optimising energy yields, with a strong focus on safety and sustainability. Further details can be found on the website at www.res-group.com.
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